3 Things You Need to Know About Vendor Management Software

Introduction

Delivering projects in Oil & Gas is a complex and often high-risk undertaking. The steps that stand between finding and evaluating new service providers, all the way through to verifying and paying for work completed, are riddled with circuitous, bureaucratic, and complicated processes that have only compounded over the decades. 

These processes almost always require a manual handoff from one system to the next. Onboarding new vendors can take quarters, instead of days or weeks. Valuable time is spent chasing or disputing invoices, and rather than having access to real-time data across a given operation, team members hired for their expertise in geology or engineering are forced to spend their time building reports and collating spreadsheets to evaluate how a given project or department is running. 

Paradoxically, when you look at what’s happening at the wellhead and underground, the Oil & Gas industry is an incredibly dynamic one, with new technology constantly being introduced to improve results. Take horseshoe remote subsea drilling, or oilfield electrification. Each of these breakthroughs is wildly innovative in its own right.

And how many times has “peak oil” been proclaimed? Each time the industry finds new and creative ways to do more.

Which poses a question: Why haven’t Oil & Gas companies applied that same level of innovation to the supply chain and everything it touches? Surely technology can also be used to radically improve how operators work with the suppliers and field personnel they need to deliver projects in the field? 

We believe innovation in the space of vendor management is an important part of that puzzle. Here’s what you need to know.

There Is General Vendor Management Software 

As you’ve probably already discovered, there is an array of options out there. At the most basic level, spreadsheets have been leveraged to perform this task since Excel was developed. Believe it or not, almost 40 years on, spreadsheets are still being used for this. We also see solutions that look like a blend of entry-level accounting software and simple project management tools. Common features might include the ability to add vendor information, access contracts, and in some cases, track payments and expenses. 

Beyond this are the more established examples of vendor management software. You’ll recognize the names and you’ll be shocked by the cost. Their offerings are more advanced, but more functionality often just creates more frustration. These systems are clunky and complex to use, with so many options and chances for customization they end up confusing your team and slowing down the very things you want them to streamline, such as the approval process.

In fact, systems like SAP and Coupa aren’t just complex, they’re surprisingly limited. You can only manage the vendors you have and know. In an industry where you need to quickly evaluate new suppliers for a particular need, this type of vendor management system just doesn’t deliver.

There Are Software Solutions Built Specifically for Oil & Gas

While there are vendor management systems built specifically for Oil & Gas that operators are using today, they share many of the same problems as more generalized software, even if those issues aren’t immediately apparent.

For example, the ability to manage any of the dozens, or hundreds, of vendors you work with is critically important. But what’s still lacking is the ability to find and evaluate new vendors. Unlike many other industries, Oil & Gas has both a constant need for new vendors and rigorous eligibility criteria, owed in large part to the massive scale and life-and-death stakes of the work in the field. 

And on the face of it, limitless customization means you can tailor the software to your company’s specific needs. This might sound fantastic, but the reality is that allowing companies to design their own approval processes and workflows plays a significant part in the often glacial pace at which these companies are able to move. 

Take something as common as invoicing, for example. With vendors forced to contend with a vast array of different submittal requirements across the industry, it’s no wonder there are errors. Remember that half of supply chain leaders dispute invoices 40-50% of the time. 

It’s not just an inconvenience. Coupled with the pace at which even correct invoices are processed, it means acting blind since spend is only visible once invoices are submitted and paid. In a world where it takes 10 days to drill a well and 90 days to be able to review spend, Oil & Gas companies are forced to make the plan, tee up the vendors, and hope for the best.

Existing Oil & Gas vendor management systems are ultimately passive, better for reviewing work that’s been completed rather than helping you today or tomorrow. No wonder only 20% of Oil & Gas decision makers feel they have the data they need to make decisions, and why the majority of Supply Chain leaders say less than 50% of their projects are completed on or under budget.

There's a Better Way

Workrise knows the problems of existing vendor management services and created a better alternative. We’ve cut through the clutter to give Oil & Gas what it needs. With Workrise Vendor Management decision makers can finally gain visibility to the true number of vendors their company uses across multiple business units and geographies. This eliminates those incidents where the right vendor has already been onboarded and is on a company’s AVL unbeknownst to other departments. 

And all the critical data (like safety records and compliance details) for those vendors is ready to be accessed, along with contracts and work statuses. Any outstanding requirements will be clearly flagged for all users to avoid any confusion or delays or stopping just one person having access to the essential information needed throughout the company. 

But it doesn't stop there. Our vendor management solution goes beyond managing existing relationships, helping you find, evaluate, and onboard new vendors quickly. Workrise Vendor Management’s specialized network search helps you identify eligible vendors wherever they are. And wherever you are — it’s as easy to discover and onboard new vendors from the field as it is from the office. 

Workrise offers access to a growing network of vendors spanning 200+ service categories across the lower 48. You’ll find vendors you already trust offering services you don’t currently use them for, along with vendors you haven’t worked with. Click on their profile to learn more about their complete range of services, as well as  their safety and vendor compliance status, so you can make an informed decision on who you work with – and start a conversation with ease – any time a new need arises. 

Finally, in addition to helping you find specific services, our vendor search can help you diversify your supplier base. Discovering small businesses, veteran-owned businesses, and minority-owned businesses of all backgrounds who are a match with your requirements is as easy as searching Google.

But that’s just the beginning. If we stopped there, we’d only be making a small step towards progress.

Because Even the Best Vendor Management Software Can Only Do So Much

When we asked decision makers in our benchmark survey, “What is the one thing you would like to see change in terms of how your company delivers projects in the field?”, the #1 opportunity identified was improved vendor management, including better sourcing, more reliability, and contingency plans. 

It seems we can all agree that the current ways of working aren’t, well, working. But it goes much deeper than that. The real problem the Oil & Gas industry faces is less to do with simply managing vendors and more to do with data. With billions of dollars changing hands, the lack of clarity for decision makers is alarming. 49% of decision-makers surveyed reported they lack the ability to get regional pricing data to benchmark bids from new vendors against the going rates in the area. It’s just as dire for out-of-network supplier data. 48% of respondents cited “data to compare and contrast vendors outside of their AVL” as data they need but don’t currently have. Take a second for that to sink in. Half of the most important decision makers in our industry don’t know if they’re paying the right price.

And it’s not for lack of interest. Decision makers like you know the data you need; our survey respondents said the most valuable data point they didn’t have access to was input costs for projects like services, labor, and equipment. More vendors means more approvals and more paperwork, and inevitably that means more errors. And more errors means more time wasted. With half of the supply chain leaders surveyed saying they dispute invoices up to 50% of the time, just imagine the hours lost. As one supply chain manager at a major U.S. natural gas company put it:

“We have an industry that doesn't like to change. We find things we're good at and we like to do the same thing over and over”.

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So we know change isn’t easy. But we also know there is a better way.

And we’re creating it. No more neverending approval chains, infinite configuration schemes, and disconnected systems Instead, we offer a solution that’s built for how we work today, while building towards a future where everyone in energy works better together.. 

Because the truth is vendor management software is just the start. It can streamline the way you work. But that’s not the same thing as fundamentally solving decades-long problems in our industry. Amidst the problems and the complexity, we see an opportunity: a connected solution that powers your supply chain. Access to more vendors without more paperwork. Fewer steps. Automated processes. Project management. Spend management. Results in real-time. All the information you and your team need to make the right decisions at the right time and pivot when necessary. 

The future of work in the energy supply chain is powered by a single, data-driven platform that we believe will transform how you do business. And while vendor management is a core component to that end-to-end solution, it’s only the beginning.